Amidst macroeconomic uncertainty and anticipated policy shifts, the stock market has recently experienced significant gains. However, savvy investors are advised to look beyond short-term market fluctuations and focus on companies with robust financials, proven business models, and compelling product offerings that promise **long-term value**. This article highlights three stocks favored by top Wall Street analysts, selected based on their track record and potential for sustained growth, as identified by TipRanks, a platform renowned for its analyst performance ranking.
Key Takeaways: Three Stocks to Watch
- **ServiceNow (NOW):** Analysts are bullish on ServiceNow due to strong Q3 results driven by **AI-related tailwinds**, a positive outlook for future growth, and the launch of promising new products like Workflow Data Fabric.
- **Snowflake (SNOW):** Following impressive Q3 results, analysts see Snowflake as a turning point in its growth story, citing factors like a revised go-to-market strategy and increased stability in core consumption growth. The signing of multiple large contracts reinforces positive outlook.
- **Twilio (TWLO):** After a period of slower growth, Twilio is showing signs of recovery, with Q3 results exceeding expectations and improved operating margins thanks to cost-cutting measures. The integration of communications with contextual data and AI is an additional catalyst for growth.
ServiceNow (NOW): Riding the AI Wave
Leading the pack is **ServiceNow (NOW)**, a company specializing in **AI-enabled workflow automation software**. Their recent third-quarter results significantly exceeded analyst expectations, largely attributed to the positive impact of artificial intelligence. Following a conversation with ServiceNow’s CFO, Gina Mastantuono, Mizuho analyst Gregg Moskowitz reaffirmed a “buy” rating and increased the price target to $1,070 from $980, reflecting the upward trend in valuation multiples.
Strong Growth Projections and New Products
Moskowitz expressed confidence in ServiceNow’s near-term (Q4) and medium-term (2026) outlook, emphasizing the company’s positioning for sustained growth. A key driver cited was the strong demand fueling the momentum of their **Pro Plus SKU offering, powered by generative AI**. Furthermore, the introduction of the **Workflow Data Fabric product** is expected to significantly expand their total addressable market to $500 billion, opening up new avenues for monetization by unifying business and technology data across an enterprise and powering new workflows and AI agents. “**We continue to believe that NOW remains very well-positioned for high growth over the next few years,** fueled by ongoing demand for workflow automation, strong cross-sell opportunities, and AI monetization,” stated Moskowitz.
Analyst Track Record
Moskowitz holds a notable rank of 221 among over 9,100 analysts tracked by TipRanks. His ratings boast a 61% success rate, with an average return of 14.6%, underscoring the credibility of his positive assessment of ServiceNow.
Snowflake (SNOW): A Data Analytics Powerhouse
Next in line is **Snowflake (SNOW)**, a prominent player in the **data analytics software** market. The company’s stock experienced a remarkable 33% surge on November 21, fueled by exceptionally strong third-quarter results. TD Cowen analyst Derrick Wood, impressed by the performance, reiterated a “buy” rating and raised the 12-month price target to $190 from $180.
Key Drivers of Q3 Success
Wood identified several key factors driving Snowflake’s Q3 success, including the positive effects of their adjusted **go-to-market (GTM) strategy**. The analyst highlighted that lower-than-expected storage headwinds were more than offset by traction in new data engineering services and early success with their **Cortex AI services**. The winning of **three $50 million contracts** in Q3 and a robust pipeline of large deals for Q4 further bolstered the positive outlook.
Sustained Growth and AI Integration
Wood’s optimism extends to Snowflake’s future, emphasizing increased stability in its core data warehousing consumption growth, reflected in strong **net retention rate (NRR)** trends. The early adoption of **new AI workloads**, particularly with **Dynamic Tables**, adds another layer of confidence to the positive projection.
Analyst’s Standing
Wood’s high ranking of 80 among over 9,100 analysts, combined with a 66% success rate and an average return of 18.1%, lends significant weight to his bullish prediction for Snowflake.
Twilio (TWLO): A Cloud Communications Comeback
Rounding out the list is **Twilio (TWLO)**, a leading provider of **cloud communication platforms**. Twilio exceeded investor expectations with its impressive third-quarter results, prompting a raised full-year revenue outlook. The company attributed this success to a combination of **financial discipline and innovative strategies**.
Recovery and Growth Acceleration
Monness analyst Brian White upgraded TWLO stock to a “buy” from a “hold,” setting a price target of $135. White acknowledges Twilio’s slowdown following the pandemic’s peak demand, noting the revenue growth deceleration from 67% in Q2 2021 to 4% in Q1 2024 and the presence of a historically bloated cost structure. However, he emphasizes the **modest acceleration in Q2 2024 and more significant improvement in Q3 2024**, indicating a clear recovery. Furthermore, improved **operating margins**, due to cost containment, efficiency measures, and divestitures, contribute to the positive outlook.
AI Integration and Future Outlook
White expresses confidence in Twilio’s ability to integrate **communications with contextual data and AI**, believing that this strategy will fuel the company’s continued growth. “**Heading into 2025, we believe Twilio is on course to extend this recovery, and the stock’s valuation remains attractive,**” he concluded.
Analyst Expertise
White’s impressive ranking of 44 among over 9,100 analysts tracked by TipRanks, coupled with a 69% success rate and an average return of 20.4%, further validates his optimistic assessment of Twilio’s future prospects.
